PayXero, a surcharging-services provider, can now add another state to the list of places where it can do business. A federal judge ruled Thursday surcharging cannot be prohibited in Kansas. The decision leaves just Colorado*, Massachusetts, and Connecticut with outright no-surcharge rules on the books.
With surcharges, merchants typically tack on at the point of sale interchange and other fees associated with credit card transactions. “If allowed to pass on the cost of credit card acceptance, such businesses are able to offer their goods and services to the significant portion of the consumer base that prefers or needs to pay with credit cards. In these industries and across the economy, credit card surcharges expand consumer choice,” Judge John W. Broomes, wrote in the order filed in the U.S. District Court for the District of Kansas. With this ruling, only Colorado*, Massachusetts, and Connecticut block surcharging on credit cards. PayXero is evaluating its options to enter these states and intend to be a 50-state provider. Network rules prohibit surcharging on debit card transactions.
Soon, there might be just two states that prohibit credit card surcharging with the passage Tuesday of a bill in Colorado that would permit the pricing strategy. The bill, SB21-091, passed both the Colorado House and Senate and now moves to Governor Jared Polis’s desk. He has 30 days to sign it. If signed into law, only Connecticut and Massachusetts would still prohibit credit card surcharging.
*Bill was signed by Governor Jared Polis and will go into effect June of 2022.